Spokesman Briefings
Date: 17/04/2008
Record of the Weekly Press Briefing on 17 April, 2008
Opening Statement
The President visited China from 10-15 of April 2008 on the invitation of President Hu Jintao. This high level interaction between the two countries had two purposes: to review our bilateral relations; and to attend the annual Boao Forum.
The delegation met with President Hu Jintao, Premier Wen Jiabao, Chairman NPC Mr. Wu Bangguo, Chairman CPC Mr. Jia Qinglin, and the Governor and Party Secretary of Xinjiang Autonomous Region.
On sidelines of the Boao Forum, bilateral meetings with President of Sri Lanka, Prime Minister of Australia, and Prime Minister of Kazakhstan also took place.
Chinese leadership was apprised of the general elections and the political developments in Pakistan . They were fully supportive of the new democratic government. Recognising that high level exchanges have been a unique characteristic of our bilateral relations, invitation was extended to the new leadership in Pakistan to visit China , including an invitation to the Prime Minister for a state visit to China at a time of mutual convenience.
It was acknowledged that China has been a consistent supporter of Pakistan 's stability and development. Our relationship is important to guard against regional instability. Pakistan and China have a time tested and an all-weather friendship.
External forces will not be allowed to effect our close strategic cooperation. Detractors want to create misunderstandings to weaken our strategic relations.
Pakistan reiterated its One-China policy. Taiwan is part of China . Tibet is also an inalienable part of China and we condemn all attempts to undermine China 's sovereignty and territorial integrity.
Defence and strategic cooperation between the two countries came under discussion and there was complete satisfaction on defence projects such as JF 17 aircraft, procurement of FC20 aircraft, Awacs and P-22 Frigates.
Civilian nuclear cooperation is proceeding satisfactorily between the two sides. Chashma-I is operational, construction of Chashma-II is six months ahead of schedule.
Energy requirements of Pakistan came under discussion. A joint power corporation could be set up in the public sector to help Pakistan meet its energy requirements. Prospects of coal mining and power production through the use of coal, including generation through imported coal, till our coal sector is developed, were also discussed. It was discussed that Bhasha Dam which has a generation capacity of 5,500 MWs and a storage capacity of 6.5 MAF, is economically viable with a rate of return as high as 25% per annum, it can pay for itself in four years.
Upgradation and modernization of Heavy Mechanical Complex came under discussion. Pakistan wants to produce power plants indigenously in HMC.
Pakistan acknowledges and appreciates the presence of about 1400 of Chinese engineers and workers, working in Pakistan on various mega-projects. We assured the Chinese leadership of their security. A Joint Task Force in the Ministry of Interior and the Home Departments at provincial level has been set up to ensure their security.
Promotion of bilateral trade was also discussed. It was acknowledged that it had grown to the level of 6.8 billion dollars per year. Free Trade Agreement will boost bilateral trade further. It is expected that the two way trade will touch $15 billion mark by 2011.
It was decided to finalize negotiations on FTA in services sector as soon as possible to make FTA between China and Pakistan a comprehensive instrument. It was discussed that an Integrated Border Management Regime should be established to boost and facilitate over-land trade between the two countries.
Finalization of Trade in Transit Agreement between China and Pakistan was also discussed. It will enable China to use the Karakoram Highway and Pakistani ports of Gawadar and Karachi for transportation of their goods to Middle-East, Africa and Afghanistan .
It was suggested that Pakistan should be used as a logistic and transportation base for Chinese investment in Afghanistan especially when they have decided to go in copper and iron-ore mining in Afghanistan.
We suggested that Bank of China and ICBC (Investment & Construction Bank of China ) open branches in Pakistan and Chinese financial institutions may consider acquiring banking assets in Pakistan . Pakistani banks want to open branches in China , but the “minimum asset requirement” to open a branch is too high and must be reduced.
Pakistan reiterated that further Chinese investment in Pakistan will be welcome. Decision of China Mobile to invest $800 million was appreciated. Pakistan will welcome Chinese joint ventures in Pakistan .
Re-location of some of Chinese textile industry in a country like Pakistan , which has a solid textile base would help value-addition and could be of mutual benefit.
Investment in mineral exploration and development sector came under discussion.
Chinese companies can also invest in the real-estate, housing and construction sectors of Pakistan . There is a huge un-tapped demand in these sectors.
Investment in Agro-based industry and livestock sector in Pakistan was also discussed.
Both sides acknowledged that despite excellent political relations time-tested, all-weather friendship, excellent defence and strategic cooperation, a lot more was desired in the development of economic relations. A number of initiatives are being taken or already taken to boost economic relations was now in place, they include:
• Joint Five Year Economic and Trade Development Plan.
• Availability of commercial credits for projects under the joint five year plan.
• Establishment of a Joint Pak-China-Investment Company.
• Free Trade Agreement – for goods.
• Free Trade Agreement for services sector is under negotiations.
• China having the liquidity, technology and the political will to promote economic growth and stability in Pakistan .
• To extend special incentives to Chinese business community for creation of special economic zones like Haier-Ruba Economic Zone were also discussed.
Following futuristic plans of mutual benefit were discussed:
• Development of a shipyard at Gwadar: Gwadar lies at the mouth of the Gulf. Movement of ships and tankers is very frequent in the area. Waiting period of ship repair is over a year. Hence development of a ship repair and manufacturing facility can be very feasible.
• Enhancing regional connectivity through a railway line connecting Gwadar to China : This will open up China to Central Asian countries, particularly Kazakhstan , Kyrgyzstan and Afghanistan and will facilitate regional trade. Pakistan stands to benefit from this regional linkage.
• IPIC Gas/Oil pipeline: This will provide an energy corridor and facilitate linkage between Central, South and West Asia .
• Lying of fiber optics network between China and Pakistan .
Despite excellent political relations and goodwill that exists between the people of China and Pakistan , our people to people contacts remain limited and need improvement.
Projection of historic heritage sites of Pakistan , upgradation of Karakoram Highway and signing of an MoU between Xinjiang Autonomous Region and the NWFP will help improve our people to people contacts.
China will have over 100 million tourists every year by 2020. Even if a friction of this is diverted to Pakistan , it would boost our tourism industry.
A consortium of 516 Chinese universities will help us in setting up a world class engineering, science and technology university at Islamabad . President of Tsinghua University , which has remained a seat of highest learning for the top Chinese leadership, also promised to join consortium of universities.
China has also promised a transfer of $500 million to the State Bank of Pakistan as balance of payment support.
The visit helped reinforce our time-tested ties and our strategic partnership. We resolved to further consolidate our all weather-friendship. The two sides stressed the need to devise mechanisms to improve implementation of various agreements and MoUs signed by the two countries.
As a follow-up to this very useful interaction I am pleased to announce that the Foreign Minister of China will be visiting Islamabad on 25-26 April 2008.
I congratulate the people of China and Pakistan on a very successful conclusion of the Olympic Torch Relay ceremony at Islamabad yesterday and assure the government and people of China of our support and cooperation in holding of the Beijing Olympics 2008.
Questions/Answers Session
Q: You mentioned that China has given Pakistan $500 million. Is it a loan or aid?
A: It is a balance of payment support.
Q: With regards to IPIC gas pipeline project what was China 's response to the suggestion of President Musharraf that China should become a part of this project?
A: On the IPIC pipeline, there was a useful discussion with the Chinese authorities. As Chinese economy is rapidly growing so it is always looking for energy sources. The Chinese see IPIC as a viable project.
Q: Pakistan has time and again supported One-China policy and recently Pakistan has also fully supported China on Tibet issue but we have not seen any statement from China in support of Kashmir . Why was that?
A: China has always supported Pakistan on all issues. Their support is always there for Pakistan and there is no need for reiteration.
Q: What sort of interaction did you have with President Musharraf during the China visit? Was it tense or cordial?
A: It was part of my job and it was a pleasant experience.
Q: China has offered help to Pakistan and as there is no one way traffic in international affairs so what Pakistan has offered to China in return?
A: The relationship is valuable for Pakistan and mutually beneficial.
Q: What type of discussions took place between China and Pakistan on civilian nuclear cooperation?
A: It concerned the ongoing civilian nuclear cooperation. Because of our growing economy we need energy and nuclear energy will be an important component of our future energy mix.
Q: Did the issue of war on terror come up in discussions with Chinese authorities?
A: Both sides discussed the issue of terrorism and showed resolve to fight terrorism. This is an ongoing cooperation.
Q: Was the political situation in Pakistan also discussed with China ? How do Chinese view the political dynamics in Pakistan , especially with regard to judicial crisis?
A: China has a policy of non-interference in the internal affairs of other countries.
Q: Does your China visit alongwith President Musharraf signify that the Cabinet has accepted Musharraf as a legitimate President?
A: The new government is confronted with numerous challenges. We are crossing the bridges as we come to them. Also, we will work according to the wishes of the people of Pakistan .
Q: How will the foreign policy under your government be different from your predecessors?
A: By and large the foreign policy of a country remains consistent. However, we are establishing two task forces in the Foreign Ministry: (i) on promotion of economic diplomacy; and (ii) on fresh thinking on foreign policy issues. These will include private sector representatives, academia, experts and officials. I felt the need to form these task forces because I thought previously only the geo-political side of issues was discussed and the economic security was not given much importance.
Q: In your opening statement you have mentioned an oil and gas pipeline under discussion with China . The discussion on gas pipeline is already made public but is there any possibility of oil pipeline as well?
A: We have talked about the pipeline, both gas and oil, as a concept which will have utility and economic viability.
Q: There are threats to Iran from various international powers specially the US . Has China assured Pakistan that in case of such threats to Pakistan it will come for Pakistan 's help?
A: Pakistan and China both believe that all issues with Iran should be settled peacefully through diplomacy.
Q: When are you going to submit the summary about the China visit to the Prime Minister?
A: An overview of the China visit has already been given to the Prime Minister. He has been briefed about the visit of China both by the Defence Minister and myself.
Q: Pakistan is facing worst economic challenges at the moment. What have you done so far to avert this economic crisis?
A: Yes, there are huge economic challenges facing the country. We don't want to enter into a blame game. The Finance Minister during his visit to the United States had held successful meetings with the international financial institutions. We will work to mitigate these economic problems.
Q: What role can China play for redressing the energy crisis in Pakistan ?
A: China has a vast experience and they also have nuclear technology. China and Pakistan can work together for overcoming the energy crisis in Pakistan . China is a consistent and reliable friend. We are proud of this friendship and we should use this bond of friendship for our economic development and growth.
Q: Were the difficulties inherent in the construction of the proposed gas pipeline through mountainous region discussed with China ?
A: This issue was discussed. We do realize that we have to pump the gas upward through the mountainous region and we are confident that this would technically be possible.
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